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Votorantim to Raise $768M for Brazilian Energy Funds

1 August 2011

(Bloomberg) August 1, 2011 – Banco Votorantim SA, the financial- services unit of Votorantim Group, is seeking to raise as much as 1.2 billion reais ($768 million) for three Brazilian private- equity funds that will invest in renewable-energy projects as the nation seeks to diversify its power supply.

The funds will invest predominantly in small hydroelectric projects, biomass plants and wind farms, Sao Paulo-based Votorantim said today in a prospectus.

Brazil is holding yearly auctions for power contracts with renewable-energy developers to help diversify its grid from large hydroelectric dams and fossil fuels. The next two are scheduled for Aug. 17 and 18.

“Renewable energy is in fashion at the moment,” Jorge Trinkenreich, director of Rio de Janeiro-based consulting firm PSR Consultoria, said today over the phone. “Brazil’s auctions have led to a rapid expansion in new types of energy projects, especially wind projects.”

Other technologies under consideration by the fund include photovoltaic solar energy projects and biogas plants, according to the filing.

The funds will be managed by Votorantim Asset Management Distribuidora de Titulos e Valores Mobiliarios Ltda., a unit of Banco Votorantim SA, according to the filing.
The minimum amount of money Votorantim expects to raise for all three funds is 500 million reais, according to the filing.

The offering will be coordinated by the fund-managing arm of Rio de Janeiro-based Banco do Brasil SA (BBAS3) and Banco Votorantim, according to the filing. It will commence on Sept. 1 and close on Oct. 31, Votorantim said.

About 68 percent of Brazil’s 115 gigawatts of power capacity comes from large hydroelectric plants while 26 percent is generated by fossil fuel-powered thermoelectric plants, according to electricity regulator Agencia Nacional de Energia Eletrica.

By Stephan Nielsen